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20 Jan 2013

Rodney Hide's brain fade

State house rentals average $110 a week. Repairs and maintenance take half that and rates and Housing NZ staff the other half.

Taxpayers keep Housing NZ afloat, kicking in $165 a week for each house. They also kick in another $230 every week in interest on what the Government must borrow to keep the house government-owned.

Clearly Rodney Hide has pulled his figures out of his own ass! The government is not borrowing $230 per week in interest for every state house. According to the article there are 70,000 state houses, which would mean the government is borrowing over $837 million per year in interest alone.

Taking the value of all state houses and then calculating the interest on that is obviously incorrect, as the government already owns most of that housing stock.

Likewise the $165 per week is money that effectively gets paid back to the government in various ways. The biggest additional cost to the taxpayer comes from maintenance costs, which have grown exponentially with many hundreds more state houses being left vacant since National came to power. With less state houses being built to replace the ones National leaves empty or demolishes, fewer people are now being accommodated by Housing New Zealand.

This ends up costing the taxpayer more in the long run, because there's additional social costs to people paying too much rent for what are often unhealthy homes in the private sector. There's also lost capital from demolishing what are usually perfectly sound houses. In effect the neoliberal agenda is a bit crazy, with only people like Rodney Hide who are a bit touched in the head supporting it.

The obvious policy is to use that $395 weekly subsidy to finance state house tenants into their own houses. And that's exactly what the National Government did on being elected in 1949. That very first state house at 12 Fife Lane, Miramar, tells the story. David and Mary McGregor bought their house, declaring it "our little bit of New Zealand". The then-government used the taxpayer subsidy to make tenants independent, rather than keeping them dependent. There's no doubt the National Government of the day won votes doing so.

Perhaps it's just Rodney Hides' tendency to not read Labour policy properly, or perhaps he has a bit of weekend brain fade. Whatever it is, Hide seems unaware that Labours housing policy (PDF) is designed to make people independent through home ownership.

Just like the last right wing government that reduced state houses by 13,000, the current National government under John Key is determined to undermine the effectiveness of our state housing sector.

They do this predominantly because it helps their property investor mates make more money... But they also degrade our state housing because they simply don't care their policy changes plunge more people into hardship.